TMI Blog2017 (5) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... eleted the penalty relying on the decision of Delhi High Court in the case of Nalwa Sons Investment Ltd.[2010 (8) TMI 40 - DELHI HIGH COURT] and furthermore on CBDT circular no. 25/2015 of 2014 wherein the Department has issued directions to the authorities directing them not to file appeal where the income tax payable on the total income as computed under the normal provision of the Act is less than the tax payable on the book profits u/s 115JB of the Act. - Decided against revenue - I.T.A No.515/(Asr)/2014, And Cross Objection No. 04/(Asr)/2015 - - - Dated:- 18-5-2017 - SH. T.S. KAPOOR, ACCOUNTANT MEMBER, AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER For The Appellant : Sh. Rahul Dhawan For The Respondent : Sh. Abdul Rashid Dullo, (CA) ORDER PER T. S. KAPOOR (AM): These are two appeals filed by Revenue against the order of Ld. CIT(A) Jammu, dated 27.05.2014 and dated 22.01.2016 respectively for Asst. Year 2010-11. The grounds of appeal taken by Revenue are reproduced below: In ITA No. 515/(Asr)/2014 2.1 The worthy assessing officer has erred in bringing to tax certain incomes like interest on FDR/Margin money, insurance claim, other income etc. totali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the financial year relevant to Assessment Year 2010-11 or upto the date of filing of the return of income of the Assessment Year 2010-11. b. Under Accounting Standard 9 on Revenue Recognition issued by ICAI, the revenue cannot be recognized if there is any uncertainty associated with the collectability of the income even under mercantile system of accounting. c. That the expenditure on account of taxes, duties, cess and the like are to be allowed as deduction on cash basis under section 43B of the Income Tax Act, 1961 even if the assessee followed mercantile system of accounting and therefore, the income on account of any tax, duty or cess must also be accounted for as income on cash (realization) basis . C.O. No. 13/(Asr)/2016, Arising Out of ITA No. 286/(Asr)/2016 1. On the facts and circumstances, the Ld. CIT(A) was very much right in upholding that where the Minimum Alternate Tax paid by the assessee exceeds the assessed tax, the tax sought to be evaded is nil and accordingly, penalty under section 271(1)(c) of the Income Tax Act, 1961 could not be imposed for concealment of income. 2. On the facts and circumstances, the Ld. CIT(A) has correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had received various insurance claims arising from various losses incurred during the operations like breakdowns, accidents, damages or other loss and which represented income from operations. As regards other income, the Ld. AR submitted that this represented amounts received from sale of scrap, sale of tender documents etc. and therefore, these were also derived from the business. As regards the denial of subsidy as capital receipt, the Ld. AR submitted that grounds in cross objections at 2 a b c are not pressed however, the assessee would like to support the appeal under rule 27 of ITAT rules and submitted that the excise duty refund though was not received and therefore was not taxable and yet even if the excise duty is considered on accrual basis the same was eligible for deduction u/s 80IB of the Act. Without prejudice the Ld. AR submitted that issue of subsidy on excise duty has now been settled by Hon'ble Supreme Court in the case of M/s Balaji Alloys Ltd. and therefore, the assessee may be allowed relief on this account itself. 7. As regards deletion of penalty, the Ld. AR submitted that as the minimum alternate tax paid by the assessee exceeded regular tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Hon'ble Supreme Court in the case of Balaji Alloys Ltd. has confirmed the order of Hon'ble Jammu Kashmir High Court in the case of Balaji Alloys Ltd. and wherein it has been held that the receipt of subsidy on account of excise duty refund is a capital receipt. The findings of the Hon ble Jammu Kashmir High Court in the case of Balaji Alloys Ltd. are reproduced below: Held, allowing the appeals, that the fact that incentives would become available to industrial units entitled thereto, from the date of commencement of commercial production, and that these were not required for creation of new assets could not be viewed in isolation to treat the incentives as production incentives. Such incentives designed to achieve a public purpose could not be construed as production or operational incentives for the benefit of the assessee alone. Further, the incentives were provided with the object of creating avenues for perpetual employment to eradicate the social problem of unemployment in the State by accelerated industrial development. Thus, the finding of the Tribunal that the excise duty refund, interest subsidy and insurance subsidy were production incentives, and henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 4 of section 271 of the Act with prospective effect, it is now a settled position that prior to 1/4/2016, where the income tax payable on the total income as computed under the normal provisions of the Act is less than the tax payable on the books profits u/s 115Jb of the Act, then penalty under 271(1) (c ) of the Act is not attracted with reference to additions/disallowances made under normal provisions. The CBDT has clarified that in cases prior to 1.4.2016, if any adjustment is made in the income computed for the purpose of MAT, then the levy of penalty u/s 271 (1) ( c) of the Act, will depend on the nature of adjustment. The above settled position is to be followed in respect of section 115JC of the Act also. The CBDT has accordingly directed that no appeals may henceforth be filed on this ground and appeals filed, if any, on this issue before Courts/Tribunals may be withdrawn/not pressed upon. Now, the fact is that the company had claimed deduction u/s 80IB in the return of income and therefore no tax was payable under normal provisions of the Act. However, the assessee company paid minimum alternate tax (MAT) amounting to ₹ 82,74,824/- on book profits of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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